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August 21, 2017

Tiger Global post Flipkart: Which way will it go?

Amidst the drama around SoftBank's $2.5 Billion investment in Flipkart, not much attention has been paid to the fact that the deal involves the exit (albeit partial) of key Flipkart backer, Tiger Global, from the most audacious Venture Capital investment in India.

The VC arm of the New York-based hedge fund, led globally by Lee Fixel, is estimated to have invested $1 Billion in Flipkart starting in end 2009. Tiger's bet on Flipkart - which arguably triggered the rush to invest and create other Internet & Mobile Unicorns in India - has also been described as the single biggest risk to the technology ecosystem. "Unfortunately, due to just one individual - Lee Fixel of Tiger Global - Flipkart has gone from being a poster child to being the single biggest risk to the technology ecosystem. I hope for a soft landing," angel investor and iSpirt co-founder Sharad Sharma had said during the heady days of 2015, when Flipkart's valuation had hit a peak of $15 Billion. After a tumultuous 2016, when many of Flipkart's US-based Mutual Fund investors wrote down the company's valuation to as low as $5.5 Billion, the capital it has raised two years hence have landed its valuation at a relatively softer $11.6 Billion.

As Tiger takes an estimated $800 million off the table at Flipkart (with an estimated 2.5 times return), how will this part exit influence the investor's next moves in the Indian market?

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.